Leading community banks and credit unions know that embracing innovation and partnering with FinTechs is critical to exceeding the expectations of their clients and members. With competitive offerings, backed by massive investments at the largest national banks, the opportunity to win clients and members over is through budget-friendly, configurable solutions executed by partnership with FinTechs. Three of Ron Shvelin’s Top 5 Banking And Fintech Trends For 2021 involve partnerships between banking providers and FinTechs.
Setting up charitable giving platforms is a low-cost, high-impact chance for financial institutions to partner with FinTech companies and deliver high quality results to their clients.
Over the last year we worked with dozens of community banks and credit unions to help them deliver brand-changing charitable giving solutions to their clients and members. As we work with VPs of Digital Experiences, Directors of Innovation, and Digital Product Managers on their rollout plans for 2021, we realized there are three key drivers making their decision to prioritize charitable giving easy.
Low Risk, High Reward
What can go wrong? What is the risk to our financial institution? What are the compliance considerations of this partnership? If you’re asking these questions first, the criteria you need to evaluate is the ratio of a new technology’s potential impact to operations versus it’s potential to drive customer loyalty.
A charitable giving account program won’t disrupt your current operations, so you can scope, pilot, and implement the program knowing that primary revenue drivers of deposit and fee revenue won’t be impacted. At the same time, the fraud and third party vendor risks are minimal. A charitable giving account program requires minimal customer data, with name and email address as the only required PII data.
The area to potentially expose normal operations to a pilot presents an opportunity to build a culture of innovation. By incorporating Customer Service, Marketing, Retail Banking, and even branch staff to the program, you will generate learnings from the complete client-facing experience, supporting more creative and agile mindsets across your internal teams.
Charitable giving accounts is the ideal low-risk for operations, high-reward for members opportunity, that will help build best-practices and innovation resiliency that can be applied in future FinTech partnerships.
Resonate with Employees & Customers
Your institution is a pillar in your community, and a charitable giving account program will be seen as an extension of all of the great work, sponsorships, and contributions that your organization is already doing and making. Charitable giving accounts, crowd-fundraising, and workplace giving are programs that your employees and clients can rally around.
Your clients and employees choose what brands they buy from and where they work, based on how that organization gives back in their communities. Charitable giving accounts attract new banking clients, drive differentiation in local markets, and provide an endless opportunity for engaging creativity. This year we’ve seen clients offering charitable incentives to drive other outcomes and KPIs, such as offering a $50 charitable bonus to clients that set up direct deposit or an auto-pay on their loan or offering charitable round-ups on debit card swipes. As you evangelize the program internally and look for team members to be a part of the working group, your staff will be passionate and eager to participate.
On average, 50% of bank clients donate between $100 and $2500 each year. This means that 50% of your member base is primed for rapid adoption to manage the giving they are already doing through charitable giving accounts. Unlike other partnerships that have a smaller prospective audience or may not resonate with employees, you can have confidence that a philanthropy-based program will resonate across employees and clients.
Drive Differentiation in the Market
To date, donor-focused innovation up and down the financial industry has been lacking. Much of the technology investment in the philanthropy space has either been focused on helping charities fundraise — think Blackbaud, GoFundMe, and Facebook Giving — or focused on the ‘1%’ high net-worth families — via high-entry point Donor Advised Funds at Vanguard Charitable, Schwab Charitable, and Community Foundations — but not focused on the 99% that are the majority of your retail baking users.
At Pinkaloo, we’ve spent five years focused on providing technology uniquely designed for mass-market donors. By providing donors with the best tools to manage their giving, and banks and credit unions with enterprise-ready giving software, we’re helping our partners at financial institutions across the country to lead this shift.
Rolling out a charitable giving program is a major earned media opportunity. Banks and credit unions can promote the total impact that they and their clients have contributed, continuously reinforcing the positive experiences your clients have with their bank. And for institutions ready to bring in their marketing analytics team, Pinkaloo’s software provides rich data and insights into the causes that banking clients are donating to. This data can be used to inform corporate giving and sponsorships, to maximize the impact of your donations, and to drive additional media coverage that will resonate with your clients.
How to Start Building Innovation Muscle Memory
Structuring and executing on innovative partnerships can be daunting, especially the first few times. Programs like MassChallenge FinTech, SixThirty, VentureTech, and PlugnPlay Fintech have been created to help source FinTechs and structure great partnerships that are set up for long-term success.
At the same time, philanthropy is ripe for innovation. Beyond building stronger relationships and leveraging charitable incentives to generate deposits and fees, you can incorporate all of the learnings into your organization's best practices for future partnerships. A Pinkaloo charitable giving program is the ideal way to innovate with immediate impact, delivering value to your banking institution, to your banking clients, and to your communities.
If we can be of help as you plan your first, or next, FinTech partnership, reach out to us. We’re happy to do a free, 30 minute consultation to share the insights we’ve gained from working with key stakeholders at banks and credit unions nationwide.